Hanes' Buy of Maidenform Should Give Spending A Lift

Brand Known For Classic 'I Dreamed' Campaign Received No Ad Support Last Year

HanesBrands is buying struggling rival Maidenform Brands for $575 million in a deal that analysts believe will provide much-needed marketing support to Maidenform and boost its retail presence.

A Hanes spokesman said the company had no plans yet regarding Maidenform and advertising agencies.

But marketing support from Hanes will be critical: Maidenform's last agency of record was the Portland, Maine-based Via Agency in 2010. The company spent only $528,000 on measured media in 2011 and nothing on measured media in 2012, according to Kantar Media. Hanes, on the other hand, spent $24 million on measured media in 2012.

"They never invested greatly in awareness efforts to maintain and keep the brand contemporary, in the top of mind of consumers," said John Coleman, CEO of Via, which represented Maidenform from 2006 to 2010. "I think that was one of the missed opportunities."

Maidenform planned 2013 as a "transition year," according to CEO Maurice S. Reznik's annual letter to shareholders, in which he mentioned investing to position Maidenform for sustainable, long-term growth. Maidenform's 2012 net income was $33 million, down from $45 million from 2010, as the brand struggled with its channels of distribution and increased shapewear competition

The brand, founded in 1922, found a place in pop culture with its its "I Dreamed" ad campaign in the 1950s and 1960s. The sexy, progressive campaign featured women wearing only pointed, conical Maidenform bras from the waist up. In each ad, a woman dreamed of an achievement that occurred in her bra: "I dreamed I was a knockout in my Maidenform bra," for example, proclaimed a poster of a woman in bra and shorts standing victorious in a boxing ring.

Hanes earned $2.3 billion on intimate apparel last year, which makes up 52% of the company's revenue. Intimate apparel at Hanes includes men's underwear, children's undergarments and ladies bras, panties and hosiery. Hanes does not break down specific revenue numbers within the category.

"What you now have is a company that has a pretty significant amount of funding behind it able to feed the smaller brand, with the ability to continually adapt to the marketplace," said Marshal Cohen, fashion industry analyst at The NPD Group. "This is no longer going to be about being competitors."

Mr. Cohen expects Hanes to transition Maidenform from a forgotten brand into one known for its products.

"It was a constant reassuring the consumer that the brand was either alive and kicking or a mature brand, trying to just keep it top of mind," Mr. Cohen said. "What this will do is now allow them to focus, and for the consumer to learn what these products will do for you. Think of it from the perspective of: now they're going to be able to tell you what the product does rather than that the product exists."